Gateway turns showrooms into PC supermarkets

Desperate stock shifting bid

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Gateway has changed its retail strategy in a last-ditch attempt to shift Christmas stock.

From now until December 24, US shoppers will be able to walk out of any Gateway store with a shiny new PC under their arm. The PC maker previously used these outlets as showrooms for its products - which punters would order and have shipped to them.

Three PCs will be on offer through the scheme, which will run in all of Gateway's 320 Country Stores - the Gateway Essential 700 PC at $799, Essential 866 Digital Photo PC at $1,299, and Select 1000 Digital Music PC at $1,599.

There was more than a hint of desperation in the announcement, made in the last shopping week before Christmas. In an effort to drag in the punters, the manufacturer is also offering them the chance to send free seasonal video greetings from its stores - Gateway staff will even set aside valuable selling time to help shoppers record and send the snippets. It will also have a prize draw to give away 100 digital cameras to store visitors.

Meanwhile, it is promising Christmas delivery on build-to-order orders made as late as midday on December 23.

The strategy switch came as Dataquest issued a warning to PC makers not to get stuck with inventory. The research company is considering cutting its forecast for US consumer PC growth for 2001 to 12 per cent from 16 per cent amid profit and sales panic from major players in the computer industry.

"January will be a bloodbath for anybody who hasn't managed to get their equipment through the channel," Dataquest analyst Martin Reynolds told Reuters.

"Stuff that doesn't move before Christmas - especially the low-end equipment - will form a big overhang."

Last month Gateway warned that disappointing sales over the Thanksgiving weekend meant it would not meet sales targets for the quarter. At the time CFO John Todd said the company was expecting a price war to kick off in next year's Q1, adding: "People are going to have to be aggressive to get the inventory out." ®